Study: Subprime Lending Fueled by Campaign Cash

Make sure you’re sitting down for this one: A new study finds that the mortgage industry boosted its campaign contributions to congressional districts that had a large share of subprime borrowers during the housing boom in order to influence government housing policy. (Hat tip to Felix Salmon).

The report, from researchers at the University of California, Berkeley, and the University of Chicago’s Booth School of Business, concludes that campaign cash from the mortgage industry outpaced contributions from the rest of the financial industry from 2002 to 2006, and that donors targeted members from both parties that had more subprime borrowers in their districts.

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